The Dow continued its winning streak on Wednesday closing above 26,000 points for the first time. The expectation of higher corporate earnings is one of the key factors driving growth in Wall Street at the moment. Dow Jones reached its all-time high in intraday trading too. There is also positive news to report on the S&P 500. The index has already gained 4.8 percent this year and the trend is expected to continue. Three-quarters of the 36 S&P 500 companies that have reported so far are expected to top earnings estimates. Future earnings for the companies are also looking good.
Lower corporate tax rates passed under the GOP tax bill are expected to have a positive effect on earnings moving forward. The Nasdaq Composite Index grew to end the day 1.03 percent higher. There were also important gains from a few listed companies. Boeing, for example, was one of the biggest movers gaining 4.3 percent after the American airplane manufacturer confirmed a joint venture with Adient, a leading car seat manufacturer. The venture is designed to help Boeing make improved airplane seats.
Tech stocks were also not left behind. IBM was up 2.9 percent as analyst gave a positive outlook on the stock. Despite these successes, there were still some companies that traded lower. Earnings reports for these firms were not good enough with forecasts failing to do much to excite the market. The financial industry was the hard hit. Goldman Sachs and Bank of America were two of the biggest losers in the financial market. The companies reported disappointing earnings.
Overall, the S&P banks subsector fell in early trading although it was able to rebound during the day to close 0.6 percent up. The Bank of America was down 0.2 percent. Yearly profits for the company were significantly slashed by a $2.9 billion one-time tax bill. On the other hand, Goldman Sachs reported its first quarterly loss in six years. The bank attributed this to the loss in trading revenue and other tax-related charges. The bank saw stocks fall by 1.9 percent at the close of trading on Wednesday.
Nonetheless, Ford was the biggest loser in the day’s trading. The American automaker was down 7.0 percent after reporting poor profits. General Electric also lost 4.7 percent in stock value. The company has been on a losing streak since Tuesday. Analysts have attributed this to the $11 billion in charges that had a massive effect on earnings.
In general though, the US financial market is looking good with prospect also looking robust. The S&P 500, for example, has already reported 86 new 52-week highs as the Nasdaq Composite reported 107 new highs over the same period. Only 6 and 31 new lows were reported respectively. The trade volume averaged at about $7.4 billion. This was a significant improvement compared to the average trade volume over the last 20 days that stood at $6.31 billion. It’s a winning streak that started sometime last year and it appears that there is still more room for improvement in 2018.
